VAT in Switzerland: rates, registration and returns 2026
VAT in Switzerland is an indirect federal tax on goods and services. Whether you're liable for VAT, which rate applies to your goods and services and how to submit your return on time comes down to three decisions: the revenue threshold, the tax rate and the reporting method. Companies with annual revenue of CHF 100'000 or more register with the Swiss Federal Tax Administration (SFTA) and, depending on the method, file returns quarterly, half yearly or, on request, once a year.
What is value-added tax in Switzerland?
Value-added tax (VAT) in Switzerland is a federal tax on consumption that businesses collect and remit to the FTA. It is legally rooted in the Value Added Tax Act (VATA, SR 641.20). VAT is levied by the Confederation, but the economic burden is borne by the consumer: the business acts as a collecting agent and forwards the collected tax.
VAT is one of the Confederation's most significant sources of revenue, accounting for around 30% of federal receipts. The rates have applied in their current amounts since 1 January 2024: 8.1% (standard rate), 3.8% (special rate for accommodation), and 2.6% (reduced rate). They were raised following the popular vote on 25 September 2022, which aimed to stabilise Old Age and Survivors' Insurance (AHV).
The Federal Department of Finance (FDF) is the superior department of the FTA and bears political responsibility for shaping federal tax legislation. For the day-to-day operations of taxable businesses, however, the FTA is the key point of contact: it accepts registrations, audits tax returns, and levies default interest in the event of late payment.
Which VAT rates apply in Switzerland in 2026?
Since 1 January 2024, three VAT rates have been in force in Switzerland, which were increased by the popular vote on 25 September 2022. The Federal Council regulated implementation by ordinance; the FTA has applied the new rates to all taxable supplies ever since. Prior to 2024, the rates were 7.7%, 3.7%, and 2.5%.
Rate | Percentage | Examples of application |
|---|---|---|
Standard rate | 8.1% | Electronics, clothing, gastronomy, consulting, construction |
Special rate for accommodation | 3.8% | Hotel stays, camping, guest rooms, breakfast at a hotel |
Reduced rate | 2.6% | Foodstuffs, non-alcoholic beverages, books, magazines, medication, plants |
Not every supply is subject to tax. Under Art. 21 VATA, certain supplies are exempt from VAT: these include healthcare services, educational offerings, and social welfare services. Anyone who exclusively provides exempt supplies does not need to register and cannot claim input tax deductions.
If you provide multiple supplies at different rates, the general rule applies: each independent supply is billed at its own rate. Only when several supplies are offered for a total consideration may the predominant supply determine the rate for the whole, provided it makes up at least 70% of the total consideration (Art. 19 VATA). A hotel that offers wellness services alongside overnight accommodation (3.8%) therefore breaks down the charges separately and applies the correct rate depending on the type of service. The FTA provides leaflets that clarify sector-specific delimitation issues.
When does VAT liability arise, and how does registration work?
A business in Switzerland becomes liable for VAT as soon as its annual turnover exceeds CHF 100’000, regardless of its legal form. Whether a sole proprietorship, GmbH, AG, or association: according to Art. 10 VATA, worldwide turnover from taxable supplies is decisive. Foreign businesses providing taxable supplies in Switzerland are also subject to this obligation.
When tax liability begins depends on the situation: for existing businesses, the exemption ends if the turnover threshold was exceeded in the completed financial year; tax liability then begins with the new financial year. Anyone newly commencing or expanding business activities becomes liable for tax as soon as it is foreseeable that the threshold will be reached within twelve months (Art. 14 VATA). Registration via the FTA portal must take place within 30 days of the start of tax liability. Upon entry in the VAT register, the existing Business Identification Number (UID) becomes the VAT number, which must appear on all invoices going forward.
Non-profit organisations and associations are likewise subject to reporting obligations as soon as they exceed the applicable turnover threshold with taxable supplies. For non-profit institutions as well as sports and cultural associations run on a voluntary basis, however, this threshold is higher: they only become liable for tax from a turnover of CHF 250’000 (Art. 10 para. 2 VATA). Foreign service providers carrying out taxable supplies in Switzerland may also need to register; no registration requirement applies if they exclusively provide supplies subject to reverse charge (acquisition tax), because the Swiss recipient accounts for the tax in that case. Anyone required to register generally needs a tax representative in Switzerland; following the partial revision of the VATA as of 1 January 2025, the FTA can waive this requirement under certain conditions.
Anyone with an annual turnover below CHF 100’000 can opt for voluntary tax liability under Art. 11 VATA. This is particularly worthwhile during the initial setup phase involving high investments, as input tax on business expenses can then be deducted. For more on the bookkeeping fundamentals, see the article Accounting Basics for SMEs.
How does the input tax deduction work?
Anyone who owes VAT may deduct the input tax paid on their own purchases and remit only the net difference to the FTA. The input tax deduction is set out in Art. 28 et seq. VATA and forms the core of the VAT system: tax is only levied on the actual value-added stage of the respective business.
A concrete numerical example shows how the calculation works in practice: a business achieves CHF 50’000 in turnover and owes CHF 4’050 in VAT on it (8.1%). It purchased materials for CHF 10’000 and paid CHF 810 in input tax in the process. The amount to be remitted to the FTA is therefore CHF 3’240, because the input tax paid is deducted directly from the VAT owed.
Prerequisites for the input tax deduction:
The supplier must be liable for VAT and identified as such on the invoice.
The invoice shows the mandatory details pursuant to Art. 26 VATA (UID number, tax rate, tax amount). If an item of information is missing, the deduction is not automatically forfeited: the principle of free evaluation of evidence applies (Art. 81 VATA), meaning proof can also be provided by other means. Complete documents, however, avoid discussions during an audit.
The acquired supply serves a taxable commercial activity, not a supply exempt from VAT under Art. 21 VATA.
A full input tax deduction is not possible if a business provides both taxable and exempt supplies and purchases cannot be clearly attributed to a taxable activity. In such mixed cases, the input tax deduction must be reduced proportionately. The FTA accepts various allocation keys, provided they are appropriate and clearly documented.
Which accounting method suits which business?
The choice of accounting method affects how much administrative effort the VAT return entails and whether a full input tax deduction is possible. Taxable persons can choose between two methods officially offered by the FTA: the effective method and the net tax rate method (SSS).
Criterion | Effective method | Net tax rate method |
|---|---|---|
Input tax deduction | Full, based on all receipts and invoices | Not full; sector-specific rates set by the FTA |
Bookkeeping workload | Higher, recording all incoming and outgoing invoices | Lower, simplified procedure |
Reporting frequency | Quarterly (annually upon application) | Semi-annually (annually upon application) |
Turnover limit | No limit | Up to CHF 5’024’000 annual turnover and a maximum tax liability of CHF 108’000 per year |
Change of method | Application to the FTA required | Application to the FTA required |
The effective method is standard and is always worthwhile when a business posts high input tax amounts from investments or material purchases. The net tax rate method simplifies reporting because the FTA sets sector-specific flat rates, eliminating the need for full substantiation of all input tax receipts. In exchange, the effective input tax deduction remains incomplete.
Since 1 January 2025, there has also been the option of annual reporting: businesses with an annual turnover of up to CHF 5’005’000 can apply to the FTA to settle VAT only once a year and pay instalments during the year. This option was introduced with the partial revision of the VATA and is available under both methods.
Regardless of the method chosen, you must decide whether reporting takes place on the basis of agreed consideration (invoice date) or collected consideration (payment receipt). Art. 40 VATA permits both options. Accounting based on collected consideration is particularly advantageous for businesses with long payment terms, because the VAT is only due when funds are actually received, avoiding the need to pre-finance the tax. A change of method is possible, but requires an application to the FTA.
How do you file a VAT return, and what deadlines apply?
VAT returns are now submitted exclusively via the FTA portal «MWST-Abrechnung pro», in each case within 60 days of the end of the reporting period. The portal replaced the previous «MWST-Abrechnung easy» service in 2026. The process follows five steps:
Step: Registration and setup on the FTA portal «MWST-Abrechnung pro»
The UID number is required for portal access; upon VAT registration, it is entered in the VAT register.
Step: Record turnover and input tax for the reporting period
Under the effective method, record all incoming and outgoing invoices individually
Under the net tax rate method, the total turnover is sufficient.
Step: Fill in the return and verify the calculations
The portal calculates the amount due automatically.
In the case of multiple tax rates, enter each rate separately.
Step: Submit the return before the deadline expires
The submission deadline is 60 days after the end of the reporting period pursuant to Art. 71 para. 1 VATA.
Step: Make payment within the deadline
The payment deadline is likewise 60 days after the end of the reporting period (Art. 86 VATA).
In the event of default, default interest is charged at the current FTA rate.
Overview of deadlines and consequences:
Submission deadline: 60 days after the end of the reporting period (Art. 71 para. 1 VATA)
Payment deadline: identical to the submission deadline (Art. 86 VATA)
Default: default interest at the current FTA rate (available at estv.admin.ch)
Annual reconciliation: once a year for all taxable persons (finalisation)
Regardless of the accounting method, every taxable business must reconcile its VAT returns with its annual financial statements once a year (finalisation, Art. 72 VATA). If any discrepancies are identified, they must be corrected within 180 days of the end of the financial year; a further 60 days then remain for submitting the correction return. If no correction is made within 240 days of the end of the financial year, the FTA assumes that the returns submitted are complete and correct.
What must a VAT-compliant invoice contain?
A VAT-compliant invoice must contain certain mandatory information so that customers can deduct the stated VAT as input tax without any issues. The legal basis is Art. 26 VATA. While missing details do not automatically lead to the loss of the input tax deduction, as the principle of free evaluation of evidence has applied since 2010 (Art. 81 VATA), a complete invoice remains the simplest and most reliable proof in practice. The checklist:
Name and address of the supplying business
UID number with the suffix «MWST» (or «TVA» / «IVA», e.g. CHE-123.456.789 MWST)
Name and address of the recipient of the supply
Date or period of the supply
Description of the supply provided
Consideration (for prices incl. VAT, stating the tax rate is sufficient)
Applicable tax rate as a percentage
Tax amount in CHF, or a note indicating that VAT is included in the consideration
For supplies at multiple tax rates: separate breakdown for each rate
The UID number follows the format CHE-123.456.789, where the full stops are structural separators used by the federal business register, not thousands separators. The UID number should always appear on the invoice with the suffix «MWST» (or language equivalent) so that the issuer's tax liability is recognisable. Without this suffix, the detail is formally not a VAT number; while the recipient's input tax deduction will not fail on this point alone, an invoice is only clean and dispute-free with the suffix.
If you want to issue invoices regularly and without errors, you can automate recurring invoices, ensuring that all mandatory fields are populated by default.
Automatically link VAT returns and bookkeeping
Managing accounting and VAT reporting in a single system reduces transmission errors and keeps deadlines in view. When you upload a supplier invoice in nextesy, AI creates a draft entry with the appropriate account and VAT rate. In the VAT report, you see all the figures for the reporting period; you transfer the values to the FTA portal and export the report and VAT journal as a PDF, Excel, or CSV file. nextesy supports both the effective method and the net tax rate method. To see how this works in practice, read the article How AI makes accounting in Switzerland more efficient.
Frequently asked questions about VAT in Switzerland
What are the VAT rates in Switzerland?
Three rates have been in force in Switzerland since 1 January 2024: 8.1% (standard rate), 3.8% (special rate for accommodation), and 2.6% (reduced rate for everyday goods such as food, medication, and books). The FTA applies these rates to all taxable supplies. Prior to 2024, the rates were 7.7%, 3.7%, and 2.5%.
Which VAT rates exist, and when do they apply?
The standard rate of 8.1% applies to most goods and services, the special rate of 3.8% to hotel accommodation and related lodging services, and the reduced rate of 2.6% to food, medication, and books. Which rate is to be applied depends on the nature of the supply pursuant to the VATA. Multiple supplies are generally accounted for at their respective individual rates; only in the case of an overall consideration may the predominant supply determine the rate for the whole, provided it accounts for at least 70% of the consideration.
What is subject to VAT in Switzerland?
In principle, all supplies of goods and services for consideration provided in Switzerland by a business with an annual turnover of more than CHF 100’000; for non-profit institutions and voluntary sports and cultural associations, the threshold is CHF 250’000. Certain supplies are exempt under Art. 21 VATA, such as in healthcare and education. Anyone who exclusively provides such exempt supplies is not liable for VAT and cannot claim input tax deductions.
What mandatory information must a VAT-compliant invoice contain?
At a minimum, the name and address of both parties, UID number with the suffix «MWST», date of supply, description of supply, consideration, tax rate, and tax amount must be stated; if VAT is included in the price, stating the tax rate is sufficient. For supplies at multiple rates, each rate must be listed separately. Missing details do not automatically result in the loss of the input tax deduction, as the principle of free evaluation of evidence applies; however, a complete invoice is the simplest proof vis-à-vis the FTA.
Can I register voluntarily for VAT even if my turnover is below CHF 100’000?
Yes, voluntary submission to tax liability is possible under Art. 11 VATA and permits input tax deductions on business expenses. This is particularly advantageous during the startup phase with high investments, because the input tax paid on purchases can be offset directly against the VAT owed. Registration is carried out via the FTA portal.
